V8landy Posted March 9, 2011 Report Share Posted March 9, 2011 (edited) I have only been with my new company 6 months, but just been told I can join the new sharesave plan. Either a 3 or 5 year option, and can buy shares at 20% less than current value (321 V 401) and in either 3 or 5 years, buy shares at market value then. Yes I know shares can go up or down, but shares are at lowest they have been, but now showing a strong upward trend. Company has just given full year results with 14% up on last year at nearly £250 million profit...so not doing to bad. Also share plan says even if share value goes to zero, you can get back what you have paid in + 1.10% AER Just had a 5% pay rise and also will be going up a grade in April, so in effect by adding this money to the shares my take home pay will have not have increased but some money in either 3 or 5 years. I am actually thinking of taking both the 3 and 5 year out at the max payment of £250 each I can not see anything to loose??? Edited March 9, 2011 by V8landy Quote Link to comment Share on other sites More sharing options...
HDAV Posted March 9, 2011 Report Share Posted March 9, 2011 Share schemes are usually very good missus lost out on thousands when she ticked the wrong box on share save scheme with a previous employer.....WOrth speaking to a proper IFA Quote Link to comment Share on other sites More sharing options...
DSPUK Posted March 9, 2011 Report Share Posted March 9, 2011 I bought into my company share scheme and they never moved for five years after the five year scheme term so I sold them and built an extension - next thing is they went from three quid to ten quid - they are now at £1.80 and a lot of employee's have lost a lot of money - one couple I heard of were worth £100k at ten pound a share - lost most of it - they only lost a theretical profit. Warning!!!!!! shares can go down as well as up- When I sold my house I got more back than the shares could ever have gave me. But without share save scheme I couldn't have built the extension. As you say you have the option at end of term to either take shares if they have increased or take your money back at 1.1% - The £250 a month for 5 years was hell of a lot to pay but I did it and benefitted from it. dave Quote Link to comment Share on other sites More sharing options...
fortune82 Posted March 9, 2011 Report Share Posted March 9, 2011 The benefit of buying shares through a share save scheme is that you can transfer them to a stocks and shares ISA and therefore avoid paying any tax on dividends and any capital gains. What sector is the industry in? Do they pay a dividend as this is worth considering. For example if they pay a 5% dividend and they have your cash for 5 years then you have lost out on 25% growth on your cash which obviously negates the 20% you save through the scheme. Also are you buying the shares at minus 20% of todays value or the value in 3 or 5 years? Quote Link to comment Share on other sites More sharing options...
V8landy Posted March 9, 2011 Author Report Share Posted March 9, 2011 (edited) Also are you buying the shares at minus 20% of todays value or the value in 3 or 5 years? Hi P They are at 20% of todays value Thats good info about the trasfer to S&S ISA You have PM as to which compnay it is, but for others it is Power Generation. Edited March 9, 2011 by V8landy Quote Link to comment Share on other sites More sharing options...
Chris Bb Posted March 9, 2011 Report Share Posted March 9, 2011 Best thing on Earth. If the shares have gone up you get to buy them at a seriously reduced price, then it's up to you to either hang on hoping they'll go even higher or get rid ASAP, if they've gone down then don't buy, just bank the cash. Wish my current company had such a scheme but it's privately owned. Quote Link to comment Share on other sites More sharing options...
V8landy Posted March 9, 2011 Author Report Share Posted March 9, 2011 Wish my current company had such a scheme but it's privately owned. You never know they might float it? Quote Link to comment Share on other sites More sharing options...
Tam Posted March 9, 2011 Report Share Posted March 9, 2011 Best thing on Earth. If the shares have gone up you get to buy them at a seriously reduced price, then it's up to you to either hang on hoping they'll go even higher or get rid ASAP, if they've gone down then don't buy, just bank the cash. Wish my current company had such a scheme but it's privately owned. :good: :good: :good: Quote Link to comment Share on other sites More sharing options...
Chris Bb Posted March 9, 2011 Report Share Posted March 9, 2011 You never know they might float it? Nah, it's owned by an Australian pension scheme. Plus, at my age, it's too late to build up sufficient years. Quote Link to comment Share on other sites More sharing options...
FalconFN Posted March 9, 2011 Report Share Posted March 9, 2011 If you can spare the cash now then do it as you won't loose any money if the shares go down - just don't buy them at the end. I've done the share save scheme a few times and have almost doubled my money on all but the last one when the company's shares fell from £5 to their current rate of 10p! The worst thing that can happen is that you get your money back, and as the likelyhood of the economy growing in the next 5 years is fairly good, the best case is that you get an exceedingly good return. Good luck. Quote Link to comment Share on other sites More sharing options...
Sprackles Posted March 9, 2011 Report Share Posted March 9, 2011 Not sure exactly how your scheme works but where I work, the option price was set at the start of the saving term. Once the 5 years were up, you either exercised your options to buy at the price fixed at the start or you took the money with bonuses and interest. Eitherway it was a win situation. My 1st scheme finished with the option price higher than the share price so I took the money, nothing lost, gained some interest and bonuses, better than a standard scheme. 2nd attempt was at an option price of £1.25 with shares valued at £2.75. Nice little earner. Quote Link to comment Share on other sites More sharing options...
Mr Potter Posted March 9, 2011 Report Share Posted March 9, 2011 I have only been with my new company 6 months, but just been told I can join the new sharesave plan. Either a 3 or 5 year option, and can buy shares at 20% less than current value (321 V 401) and in either 3 or 5 years, buy shares at market value then. Yes I know shares can go up or down, but shares are at lowest they have been, but now showing a strong upward trend. Company has just given full year results with 14% up on last year at nearly £250 million profit...so not doing to bad. Also share plan says even if share value goes to zero, you can get back what you have paid in + 1.10% AER Just had a 5% pay rise and also will be going up a grade in April, so in effect by adding this money to the shares my take home pay will have not have increased but some money in either 3 or 5 years. I am actually thinking of taking both the 3 and 5 year out at the max payment of £250 each I can not see anything to loose??? V8landy, you need to check but I am reasonably certain you can only "invest" a maximum of £250 a month in company sharesave schemes, this is a tax thing as you pay the £250 from your gross pay i.e. you don't pay tax on the £250 so if you are a 40% taxpayer the actual reduction in your nett pay will be £150. I have worked in the electricity generation industry for very nearly 40 years and have been in various sharesave schemes for nearly half of those of those years. The first of them with PowerGen was the most lucrative, that paid for my first (2nd hand) Range Rover Only a crystal ball will tell you what the share price will be in 3 or 5 years time but the way I've always looked at it was that if I didn't participate in the share save I'd not save at all and the money would just fade away, almost certainly on something I didn't need So OK if I invested sensibly I could beat the fall back interest rate of 1.1% but if it wasn't for sharesave I wouldn't save at all and I couldn't save tax free. In my humble opinion I would be a mega fool if I didn't participate but only you can make that decision, I wouldn't bother with an IFA, they will either charge you to tell you to go ahead with what you've worked out yourself or try and persuade you that some alternative investment or other (which they will get a hefty commission on - independent my ****) would be better for you. Mr Potter Quote Link to comment Share on other sites More sharing options...
AlistairB Posted March 9, 2011 Report Share Posted March 9, 2011 I've invested in every one of these my company has offered, you cant lose. As others have said, either take the shares or get your money plus interest back. The firm i work for even lowered the price of the option to buy as a result of the poor performance of the stock market last year - within market rules of course. It's win/win AB Quote Link to comment Share on other sites More sharing options...
4eyes Posted March 9, 2011 Report Share Posted March 9, 2011 Another vote for joining the scheme. You don't actualy buy the shares until the maturity date Si you can always get your money back if the share price has dropped. At worse it's just a savings plan with a small interest rate. So definatly worth doing as you cannot loose what you put in until after you buy the shares. However current tax rules limit you to £250 a month to all schemes you contribute to. So bear that in mind if you plan on joining next years scheme or the one after that and so on. But if the price is good this year then it's your call if you want to use all your allowance Quote Link to comment Share on other sites More sharing options...
Radar_uk Posted March 10, 2011 Report Share Posted March 10, 2011 I have took one out with my company every year for several years and never lost out on any of them and had some nice little earners :-) Quote Link to comment Share on other sites More sharing options...
V8landy Posted March 10, 2011 Author Report Share Posted March 10, 2011 Thanks all for your advice. I have taken out the full £250 for 5 years. Fingers crossed for a decent share price in 5 years time :D Quote Link to comment Share on other sites More sharing options...
Chris Bb Posted March 10, 2011 Report Share Posted March 10, 2011 Thanks all for your advice. I have taken out the full £250 for 5 years. Fingers crossed for a decent share price in 5 years time :D Well done you. If the share price isn't good at least you'll have £15k plus interest, should get a good gun for that. Quote Link to comment Share on other sites More sharing options...
verminator69 Posted March 11, 2011 Report Share Posted March 11, 2011 I have only been with my new company 6 months, but just been told I can join the new sharesave plan. Either a 3 or 5 year option, and can buy shares at 20% less than current value (321 V 401) and in either 3 or 5 years, buy shares at market value then. Yes I know shares can go up or down, but shares are at lowest they have been, but now showing a strong upward trend. Company has just given full year results with 14% up on last year at nearly £250 million profit...so not doing to bad. Also share plan says even if share value goes to zero, you can get back what you have paid in + 1.10% AER Just had a 5% pay rise and also will be going up a grade in April, so in effect by adding this money to the shares my take home pay will have not have increased but some money in either 3 or 5 years. I am actually thinking of taking both the 3 and 5 year out at the max payment of £250 each I can not see anything to loose??? Go for it fella,if you can afford the £250 per month,you canny go wrong. Quote Link to comment Share on other sites More sharing options...
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